Hayasa Metals Inc.
TSXV: HAY | OTCQB: HAYAF | FSE: FR20

The clinical pressure on blood cancer diagnostics is most visible in acute myeloid leukemia (AML), one of the more aggressive forms of the disease. After a physician diagnoses AML, molecular testing is ordered to identify the specific genetic mutations driving the disease, because those mutations determine which targeted therapies will work. Standard turnaround time for those molecular results is 10 to 15 days. The physician then faces two options, neither of which is satisfactory. The first is to begin standard chemotherapy immediately, without waiting for results, which often eliminates targeted therapy options once those results arrive. The second is to wait 10 to 15 days, which puts the patient's life at risk because AML progresses quickly. A 4-hour rapid AML test that returns actionable molecular information on the same day as diagnosis would allow targeted therapy to begin on day one.

Beyond the AML example, the broader diagnostic accuracy and turnaround time challenges are well documented. Studies cited by the Company estimate blood cancer misdiagnosis rates may reach 25 to 40 percent, drawing on research published in the Journal of Clinical Oncology in 2007 and a 2014 American Society of Clinical Oncology review of second-opinion pathology results. Industry turnaround times for molecular testing typically run 10 days or more. The American Medical Association has estimated the cost of diagnostic errors at $100 billion annually within the U.S. healthcare system. For patients, the outcomes that follow misdiagnosis or delayed diagnosis include incorrect treatment, lost time, increased morbidity, and in some cases, mortality.

The structural reasons for the problem are economic as well as clinical. The diagnostic industry has historically competed on price and turnaround time, often at the expense of quality and accuracy. Tests that require expensive equipment, highly trained lab staff, and complex workflows are batched to control costs, which lengthens turnaround. Tests that interrogate a single gene at a time require multiple machines and reagent kits to address one disease workup, raising capital costs and slowing throughput. Tests that rely on broad next-generation sequencing panels can deliver hundreds of gene readouts but cost too much for routine reimbursement when only a handful of those genes are clinically necessary. The tools widely available to laboratories do not match what clinicians need.

Precipio's working premise is that this gap can be addressed by developing diagnostic products that are simpler to operate, faster to deliver results, and economically attractive to laboratories, while supporting improved diagnostic accuracy. The Company's two-division structure forms the operational foundation of that response.

Most diagnostic product companies fund their development through outside research facilities, contract labs, and external clinical validation programs. Precipio is structured differently. Management describes the Company's pathology laboratory as the first customer for every product Precipio develops. The lab operates as the in-house R&D environment, generating revenue from clinical services while supplying the patient samples, instrumentation, clinical workflows, and clinician feedback that product development depends on. Specimen access, often the most expensive and difficult input for diagnostic product companies, is built into the model.

The economics of this structure inform how the Company operates. Pathology services generate recurring revenue that the Company uses to support R&D activities and reduce reliance on dedicated external research funding. The same infrastructure that produces clinical reports also produces validation data, performance benchmarks, and use-case experience for new products. Precipio has cited its BCR-ABL1 assay as an illustration of what this approach enables: development time of three months, total development cost under $100,000, and a final product the Company describes as the most advanced assay of its kind in the market.

The Company highlights five operational dimensions where it believes its integrated approach differs from typical industry alternatives. Workflow on Precipio's products is simple rather than complex, which the Company describes as streamlining lab processes and reducing error rates. Required labor skill is low rather than high, which lowers labor cost and makes recruiting and training easier. Capital equipment requirements run under $25,000 per platform, compared with more than $1 million for many competing technologies. Gross margins on Precipio's products exceed 50 percent, compared with industry norms in the 10 to 15 percent range. Results delivery runs one to three days, compared with one to three weeks for typical alternatives.

The lab also informs which products to build. Because Precipio's clinical team works with the same diagnostic challenges that its customer labs face, the Company can prioritize product development around problems with demonstrated commercial demand. New scientific publications, evolving disease classification standards, and clinician feedback translate into development priorities on a near-continuous basis. Management has stated an intent to maintain a development cadence focused on first-to-market positioning for clinically relevant assays.

Two proprietary product platforms anchor the Products Division: HemeScreen & Bloodhound and IV-Cell. Each addresses a distinct laboratory problem, and each was developed and refined inside Precipio's own clinical laboratory before commercial release.

HemeScreen & Bloodhound are a suite of disease-specific molecular diagnostic panels designed to run on a single, low-cost platform: an RT-PCR machine (reverse transcription polymerase chain reaction, a widely available laboratory instrument that detects specific genetic sequences). RT-PCR equipment typically costs approximately $25K, compared with capital equipment costs that can exceed $1 million for many alternative platforms. Each HemeScreen or Bloodhound panel covers between four and seven genes, matching the standard clinical workup requirements set out in National Comprehensive Cancer Network (NCCN) and World Health Organization (WHO) guidelines for specific blood cancer disease states. The first panel addressed Myeloproliferative Neoplasms (MPN). Subsequent panels have been added for Acute Myeloid Leukemia, Chronic Lymphocytic Leukemia, Cytopenia, and Chronic Myelogenous Leukemia (BCR-ABL).

During 2024, Precipio released BCR-ABL1 and Bloodhound MPN assays. These provide lower limits of detection than the original HemeScreen panels and produce quantitative results. Both were released alongside complementary analysis software (BHAS, the Bloodhound Analysis Software) designed to streamline data review and reduce technician time per case. Customers using HemeScreen and Bloodhound have reduced test turnaround time from approximately two weeks to two days and have improved the financial economics of their molecular testing programs.

IV-Cell is a proprietary cell culture media that addresses a workflow flaw specific to cytogenetic testing. When a bone marrow or peripheral blood sample arrives at a cytogenetics lab, the lab must immediately culture the cells before further analysis can proceed. Cytogenetic workflows allow for the culturing of only one of four hematopoietic cell lineages at a time: myeloid cells, B-cell, T-cell, or plasma cells. Existing commercial products require the lab to choose a single lineage at the start of the process, typically based on the oncologist's clinical suspicion. If that suspicion is wrong, the lab cultures the wrong cell type and can produce a false negative result. Precipio's internal data indicate this occurs in approximately 40 percent of patient cases.

IV-Cell is a universal cell culture media that allows the lab to culture all four cell lineages simultaneously, so the lab does not need to commit to a single lineage at the start. IV-Cell was validated inside Precipio's laboratory against existing commercial reagents and has been used on more than 1,000 clinical specimens. The media has demonstrated superior performance compared to the prior standard. IV-Cell is produced under a direct supply contract with a third-party manufacturer.

Precipio holds pending U.S. and European patent applications covering its proprietary panels. The product pipeline continues to expand around the same core platforms, with new assay panels and refinements developed against the same clinical workflows that produced HemeScreen, Bloodhound and IV-Cell.

The next section examines the addressable markets that the technology platform serves today and the segments management has identified as potential expansion areas.

The Company describes its addressable market in three stages, with each stage corresponding to a different segment of the molecular diagnostics market.

The current market is blood cancer genetics, which Precipio sizes at approximately $500 million in total addressable market as of 2025, drawing on a June 2023 report from Transparency Market Research on onco-hematology molecular testing.

The Company's market sizing framework identifies a near-term tier covering broader cancer genetics, where blood cancers represent approximately 20 percent of a total cancer genetics market estimated at $6.7 billion by 2027. A third tier covers molecular diagnostics overall, with a total addressable market estimated at $43 billion by 2030, drawing on the BioSpace Molecular Diagnostic Market Size Report from August 2024. In that third tier, blood cancers represent approximately 2.5 percent of the total, other cancers approximately 10 percent, and broader molecular diagnostics approximately 87 percent.

Independent industry estimates point to comparable scale across the broader oncology and diagnostics product markets. The oncology total addressable market is estimated to exceed $116 billion by 2034, with a compound annual growth rate above 5 percent. The diagnostics product market is estimated at more than $56 billion in annual revenues by 2030. The Company has indicated its intention to pursue international expansion following successful U.S. deployment, in markets where the same product opportunities exist.

Distribution is built around national channel partner agreements that give Precipio nationwide reach without a large internal sales force. Three customer categories receive the Company's products and services: physician-owned laboratories (POLs, which are independent commercial labs operated by or affiliated with physician groups), hospital and academic medical center laboratories, and reference laboratories. From its New Haven facility, Precipio currently provides diagnostic services to oncology clinicians.

Management has indicated that Products Division revenue carries higher gross margins than pathology services revenue. Growing the products business is one of the Company's stated strategic priorities, alongside continued gross margin improvement and positive operating cash flow.

Blood cancer molecular testing in the United States sits between two extremes, and Precipio's HemeScreen & Bloodhound platform is positioned in the gap between them.

At one end of the spectrum are single-gene assays. Established diagnostic reagent makers, including Qiagen, BioRad, Ipsogen, Cepheid, Asuragen, Abbott, and Entrogen, supply assays that test for mutations in one gene at a time. As an example, the JAK2 gene used in evaluating myeloproliferative neoplasms has multiple competing single-gene products. A laboratory that wants to address a typical disease workup requiring five to ten genes per disease state must purchase multiple machines, multiple reagent kits, and operate multiple parallel workflows. Capital costs can exceed $1 million per workflow, and the resulting complexity creates batching pressure that lengthens turnaround time.

At the other end are next-generation sequencing (NGS) panels, supplied by companies including Illumina, Life Technologies, Roche, Natera, PerkinElmer, BioRad, and Qiagen. NGS panels can test for tens to hundreds of genes in a single run. The technology is robust but expensive to operate, requires a high level of staff sophistication, and runs into reimbursement difficulty. Payors are reluctant to cover broad panels of 50 to 500 genes when clinical guidelines call for testing only five to ten.

HemeScreen & Bloodhound panels split the difference. Each panel covers four to seven genes, matching the clinical guideline workup for a given disease state. All panels run on a single, low-cost RT-PCR machine. Operation can be performed by laboratory technicians with limited training. Reimbursement aligns with clinical necessity rather than panel breadth.

In the pathology services business, Precipio's principal direct competitors are NeoGenomics Laboratories, GenPath Diagnostics, and Inform Diagnostics, all of which offer specialty oncology pathology services. Broader commercial competitors include LabCorp (NYSE: LH) and Quest Diagnostics (NYSE: DGX), which run wide-ranging diagnostic services that include oncology. In the liquid biopsy segment, Foundation Medicine and Guardant Health are the principal competitors.

For IV-Cell, the Company's universal cell culture media is, based on publicly available information, the only product of its kind that combines a base culture media with all required mitogens (cell-stimulating agents) for the four hematopoietic lineages. Competitors including Gibco, Irvine Scientific, Capricorn Scientific, Sigma-Aldrich, and Euroclone offer a base media plus separately purchased mitogens, requiring the lab to mix products and commit to a single lineage at the start of the workflow. Many of Precipio's competitors are substantially larger and have greater financial and operational resources for product development, regulatory work, and commercial deployment.

For the year ended December 31, 2025, Precipio reported net sales of approximately $24.0 million, representing growth of approximately 30 percent over the prior year. Gross margin for the full year was approximately 45 percent, reflecting expansion from prior periods. In the fourth quarter of 2025, the Company reported cash flow positive operations, a milestone in Precipio's transition from a development-stage operation into a commercial-scale diagnostics platform.

Year-over-year growth carried into 2026. For the quarter ended March 31, 2026, the Company reported revenue of $6.71 million, an increase of approximately 36 percent over the same quarter of the prior year. Pathology services revenue continued to lead the mix at $6.05 million for the quarter. Cash flow from operations remained positive.

Management's stated strategic priorities are to expand the proprietary diagnostic product business through partnerships, distribution channels, and broader laboratory adoption; maintain and grow the pathology services operation; pursue regulatory clearances and reimbursement coverage where applicable; and improve laboratory and manufacturing efficiencies.

Ilan Danieli serves as Chief Executive Officer of Precipio. Mr. Danieli has led the Company through the development and refinement of its integrated pathology-and-products operating model and is responsible for commercial, operational, and capital strategy. He represents Precipio in quarterly shareholder calls and in the Company's investor communications.

Dr. Ayman Mohamed is the Company's Chief Technology Officer. Dr. Mohamed leads the technology development and assay engineering teams responsible for HemeScreen, IV-Cell, and the Bloodhound molecular assay platform, including the BHAS analysis software released alongside the BCR-ABL1 and Bloodhound MPN assays.

Zaki Sabet serves as Chief Operating Officer. Mr. Sabet has responsibility for all operations across the Company's two CLIA-certified facilities in New Haven, Connecticut and Omaha, Nebraska, as well as manufacturing oversight of the Products Division.

Stephen Miller serves as Chief Commercial Officer. Mr. Miller leads commercial strategy and customer acquisition across the pathology services and products businesses, and is responsible for building out the Company's product business development team.

Miri Radomski serves as Chief People Officer and Legal Counsel. Ms. Radomski oversees human capital, legal, and corporate governance functions, including laboratory accreditations and compliance programs that govern the Company's CLIA-certified operations.

Matt Gage serves as Chief Financial Officer. Mr. Gage manages financial reporting, capital allocation, and investor communications, including the quarterly results disclosures and shareholder calls in which the Company provides additional context on its operating performance.

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